Service-related exports show growth

THE manufacturing sector continues to struggle but the news from service-related businesses is positive, the group representing Irish exporters said yesterday.

The Irish Exporters Association (IEA) said in its half-year review that exporters of services had delivered “tremendous growth”, with exports ahead by 15% in the first six months of 2005.

But manufacturing businesses were struggling to maintain market share and further job losses were on the way, it warned.

IEA chief executive John Whelan said a weaker euro, which has fallen by 11% against the dollar and 4% against the pound sterling, would help to shelter manufacturing companies from the worst effects of competition on costs. But with “intense labour rate competition” now on the way from the Far East and central America, more manufacturing jobs would be lost unless the euro continued its decline and weakened by a further 10% against the major currencies, he said.

“There is an urgent need for extensive and in-depth discussions to allow the state agencies with trade promotional responsibility to sit down one-on-one with the different manufacturers to establish what can be done for each company to ensure they remain competitive,” said Mr Whelan.

The IEA said service exports had become more important for the Irish economy, growing from 10% of total exports ten years ago to 31% last year. This would grow to 34% of the total, or more than €43 billion, in the current year, it said.

Mr Whelan called on Finance Minister Brian Cowen to develop concrete proposals to safeguard the manufacturing sector. He said dialogue between the government and industry needed to start immediately if the necessary measures were to be successfully introduced in this year’s Budget.

The IEA’s research found manufacturers of computer equipment suffered most with total exports falling 20% in the six-month period. Exports from this sector were now running at just 50% of 2001 levels, the group said.

It also said this week’s announcement of 560 job losses with the closure of the Hospira medical supply plant in Donegal was “a clear indication” that exporters in the sector would struggle in the future.

“The exporters of professional, scientific and medical devices seem to be reaching a peak in their growth pattern,” said Mr Whelan. “This sector has doubled in size since 2001 but has now slowed to minimal growth of 1.5%.”